HCW Biologics Reports Second Quarter 2024 Financial Results and Business Highlights
14 Agosto 2024 - 3:35PM
HCW Biologics Inc. (the “Company” or “HCW Biologics”) (NASDAQ:
HCWB), a clinical-stage biopharmaceutical company focused on
discovering and developing novel immunotherapies to lengthen
healthspan by disrupting the link between inflammation and
age-related diseases, today reported financial results and recent
business highlights for its second quarter ended June 30,
2024.
Dr. Hing C. Wong, Founder and CEO of HCW
Biologics, stated, “We reached a critical milestone recently that
has profound implications for the future of our Company -- we
successfully reached a settlement agreement for an arbitration that
created an overhang that hampered our progress for nearly two
years. We wasted no time in launching our multi-faceted financing
plan, including a significant equity offering and a reinvigorated
out-licensing program. We have a bright future ahead, as we have
emerged with the TOBI™ platform and a strong portfolio of
TOBI™-based molecules, as well as several development-stage ideas
that we consider “next generation” immunotherapeutics which
leverage what we learned from the human data readouts from the
initial phases of our clinical trials. We remain committed to
developing immunotherapeutic drugs that target the reduction of
senescent cells and the proinflammatory factors they secrete. Our
focus continues to be on senescence-associated disorders, most
typical in age-related diseases, including cancer. We are also
excited to bring HCW9302 to the clinic in the very near future to
evaluate this drug in the treatment of autoimmune diseases by
expanding regulatory T cells.”
Business Highlights
- On July 13, 2024, the Company
entered into a confidential Settlement Agreement and Release
(“Settlement Agreement”) to resolve arbitration brought against the
Company and Dr. Hing C. Wong, the Company’s Founder and Chief
Executive Officer. The Settlement Agreement includes mutual general
releases by and among all the parties. There were no monetary
payments or damages paid by any party under the Settlement
Agreement. See “Financial Guidance.”
- Going forward, the Company retains
ownership and control of the TOBI™ platform and TOBI™-based
molecules, with no restrictions under the Settlement Agreement on
its ability to use the TOBI™ platform for protein-fusion
molecules for non-oncology indications. The Company may pursue the
clinical development of treatments for cancer indications based on
HCW9302, HCW9206 and HCW9201. Further, HCW Biologics retains
ownership of the Wugen license and shares of Wugen common stock
transferred to the Company as the upfront licensing fee from Wugen
for granting the Wugen license.
- A new financing plan was launched
including an equity offering, which the Company intends to close
before the end of 2024. Financing plans also include out-licensing
non-core assets, and there are several discussions underway with
potential licensing partners.
Second Quarter 2024 Financial
Results
-
Revenues: Revenues for the quarter ended June
30, 2023 and 2024 were $622,807 and $618,854, respectively.
Revenues for the six months ended June 30, 2023 and 2024 were
$664,690 and $1.7 million, respectively. Revenues in both periods
were derived exclusively from the sale of licensed molecules to the
Company’s licensee, Wugen. The licensed molecules are one of the
inputs for manufacturing Wugen’s products.
- Research and development
(R&D) expenses: R&D expenses for the quarter
ended June 30, 2023 and 2024 were $1.6 million and $2.0 million,
respectively, an increase of $412,520, or 26%. R&D expenses for
the six months ended June 30, 2023 and 2024 were $3.9 million and
$4.2 million, respectively, an increase of $279,991, or 7%.
Manufacturing costs increased in three- and six-month periods ended
June 30, 2024 because the Company was replenishing its supply of a
high-expressing cell line of HCW9101. Preclinical expenses declined
in the three- and six-month periods ended June 30, 2024 due to a
change in the types of activities being performed in connection
with IND-enabling activities to prepare an IND application to
obtain permission from the FDA to evaluate HCW9302 in an autoimmune
indication. In the three- and six-month periods ended June 30,
2023, preclinical costs were incurred for setup costs for
toxicology studies and other IND-enabling studies. In the three-
and six-month periods ended June 30, 2024, costs were incurred for
supplemental research studies. Clinical trial expenses were
incurred in the three- and six-month period ended June 30, 2023
related to two clinical studies to evaluate HCW9218 in
chemo-refractory / chemo-resistant solid tumors. Clinical trial
expenses declined in the three- and six-month periods ended June
30, 2024 because these trials were fully enrolled in the first
quarter of 2024.
- General and administrative
(G&A) expenses: G&A expenses for the quarter ended
June 30, 2023 and 2024 were $1.6 million and $1.6 million,
respectively, an increase of $6,332, or 0%. The increase was
primarily attributable to an increase in fees for auditing and tax
advisory services, offset by a reduction in salaries and benefits
arising from the Company’s cost-cutting measures. G&A expenses
for the six months ended June 30, 2023 and 2024 were $3.6 million
and $3.2 million, a decrease of $436,454, or 12%. The decrease was
a result of cost-cutting measures and a decrease in legal fees
incurred in procuring patents and insurance-related costs,
partially offset by an increase in financing costs.
- Legal Expenses:
Legal expenses for the quarter ended June 30, 2023 and 2024 were
$1.4 million and $10.4 million, respectively, an increase of $9.0
million, or 629%. Legal expenses for the six months ended June 30,
2023 and 2024 were $2.5 million and $14.8 million, an increase of
$12.3 million, or 484%. The increase in legal expenses is related
to the Altor/NantCell matter. See further discussion of the
Altor/NantCell arbitration in “Financial Guidance.”
- Net loss: Net loss
for the quarter ended June 30, 2023 and 2024 was $4.3 million and
$15.3 million, respectively, an increase of $11.0 million, or 255%.
Net loss for the six months ended June 30, 2023 and 2024 was $9.4
million and $22.7 million, respectively, an increase of $13.4
million, or 143%.
Financial Guidance
The Company has raised $8.0 million to date in
2024, through a $2.5 million private placement of common stock to
officers and directors and $5.5 million issuance of Secured Notes
secured by the Company’s Wugen shares. The Company is
authorized to raise up to $10.0 million in Secured Notes and
intends to have the Secured Notes offering fully subscribed.
As of June 30, 2024, the Company believes that
substantial doubt exists regarding its ability to continue as a
going concern for at least 12 months from the issuance date of the
condensed interim financial statements, without additional funding
or financial support. After considering the elements of the
Company’s financing plan that were probable to occur within a year
of the date of issuance, the Company concluded that substantial
doubt was not alleviated in its going concern analysis.
As reported in the Company’s Form 8-K filed on
July 18, 2024, as of July 13, 2024, the Company and Dr. Hing C.
Wong, the Company’s Founder and Chief Executive Officer, entered
into the Settlement Agreement, with Altor BioScience, LLC
(“Altor”), NantCell, Inc. (“NantCell”), and ImmunityBio, Inc. (the
parent of Altor and NantCell, together with Altor and NantCell,
“ImmunityBio”), to resolve the previously disclosed arbitration
before JAMS brought by Altor and NantCell (the “Arbitration”) as
well as a complaint Altor filed against the Company in the Chancery
Court of the State of Delaware for the contribution of legal fees
and expenses advanced to Dr. Wong (“Complaint”). The parties
entered into the Settlement Agreement to avoid the costs,
disruption and distraction of further litigation. Under the terms
of the Settlement Agreement, no party will make monetary payments
to any other party or person and each party will bear its own
expenses. The Company is completing procedures required to be in
compliance with the terms of the Settlement Agreement. The
Settlement Agreement provides that, upon completion of these
procedures, the parties will stipulate that the Arbitration and
Complaint should be dismissed. The Company retains rights to
develop immunotherapeutic treatments based on TOBI™-based molecules
as well as the TOBI™ platform, in addition to the Wugen
license and Wugen equity interest. The Company reported a
balance of $10.0 million for legal fees incurred but not yet paid
that were included within Accounts payable and an accrual of $4.8
million for accrued legal fees within Accrued liabilities and other
current liabilities in the accompany condensed balance sheet as of
June 30, 2024. In order not to overwhelm the Company’s resources, a
reasonable payment plan will be required. The Company is engaged in
discussions with the law firms involved with this matter.
As reported on the Company’s Form 8-K filed on
August 12, 2024, the Company received written notices from the
Listing Qualifications Staff (“Staff”) of the Nasdaq Stock Market
LLC (“Nasdaq”) notifying the Company that it is not in compliance
with Nasdaq Listing Rules. The notifications from Nasdaq do not
impact the listing of the Company’s common stock at this time. The
Company received a notice that it was not in compliance with Nasdaq
Listing Rules for the $50.0 million market value listed securities
requirement as of June 17, 2024; the minimum bid price as of August
6, 2024; and the $15.0 million market value of publicly held shares
requirement as of August 8, 2024. The Company has 180 days from the
respective date of notice to address each deficiency. While the
Company is exercising diligent efforts to maintain the listing of
its common stock on Nasdaq, there can be no assurance that the
Company will be able to regain or maintain compliance with the
applicable continued listing standards set forth in the Nasdaq
Listing Rules.
About HCW Biologics:
HCW Biologics is a clinical-stage
biopharmaceutical company focused on discovering and developing
novel immunotherapies to lengthen healthspan by disrupting the link
between chronic, low-grade inflammation, and age-related diseases,
such as cancer, cardiovascular diseases, diabetes,
neurodegenerative diseases, autoimmune diseases, as well as other
conditions such as long-haul COVID-19. The Company has combined a
deep understanding of disease-related immunology with its expertise
in advanced protein engineering to develop the TOBI™ (Tissue
factOr-Based fusIon) discovery platform. The Company uses its
TOBI™ discovery platform to generate designer, novel
multi-functional fusion molecules with immunotherapeutic
properties. The invention of HCW Biologics’ lead molecules,
HCW9218, HCW9302, HCW9206 and HCW9201, was made via the proprietary
TOBI™ discovery platform. The University of Pittsburgh Medical
Center has agreed to include HCW9218 in an Investigator-sponsored
Phase 2 clinical trial to evaluate HCW9218 in patients with
metastatic, advanced stage ovarian cancer in combination with
neoadjuvant chemotherapy (NCT05145569).
Forward Looking Statements:
Statements in this press release contain
“forward-looking statements” that are subject to substantial risks
and uncertainties. These statements are made under the “safe
harbor” provisions of the U.S. Private Securities Litigation Reform
Act of 1995. Forward-looking statements contained in this press
release may be identified by the use of words such as “anticipate,”
“expect,” “believe,” “will,” “may,” “should,” “estimate,”
“project,” “outlook,” “forecast” or other similar words and
include, the Company’s ability to develop new immunotherapeutic
treatments for non-oncology or oncology indications; timing of
initiation of studies for age-related diseases; the Company’s
ability to continue as a going concern; the Company’s cash runway;
the Company’s expectations regarding future purchases of licensed
molecules by Wugen; the Company’s future capital-raising plans and
ability to continue with clinical development efforts until they
are achieved, if at all; and Company’s ability to pay legal fees
incurred in connection with the Altor/NantCell arbitration.
Forward-looking statements are based on the Company’s current
expectations and are subject to inherent uncertainties, risks and
assumptions that are difficult to predict. Further, certain
forward-looking statements are based on assumptions as to future
events that may not prove to be accurate. Factors that could cause
actual results to differ include, but are not limited to, the risks
and uncertainties that are described in the section titled “Risk
Factors” in the annual report on Form 10-K/A filed with the United
States Securities and Exchange Commission (the “SEC”) on May 15,
2024, and in other filings filed from time to time with the SEC.
Forward-looking statements contained in this press release are made
as of this date, and the Company undertakes no duty to update such
information except as required under applicable law.
Company Contact:Rebecca
ByamCFOHCW Biologics Inc.rebeccabyam@hcwbiologics.com
HCW Biologics Inc.Unaudited Statements of
Operations(Unaudited) |
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
2023 |
|
2024 |
|
2023 |
|
2024 |
Revenues: |
|
|
|
Revenues |
$ |
622,807 |
|
|
$ |
618,854 |
|
|
$ |
664,690 |
|
|
$ |
1,745,566 |
|
Cost of revenues |
|
(502,402 |
) |
|
|
(438,443 |
) |
|
|
(531,752 |
) |
|
|
(950,408 |
) |
Total revenues |
|
120,405 |
|
|
|
180,411 |
|
|
|
132,938 |
|
|
|
795,158 |
|
Operating expenses: |
|
|
|
|
|
|
|
Research and development |
|
1,616,666 |
|
|
|
2,029,186 |
|
|
|
3,872,479 |
|
|
|
4,152,470 |
|
General and administrative |
|
1,587,861 |
|
|
|
1,594,193 |
|
|
|
3,596,739 |
|
|
|
3,160,285 |
|
Legal expenses |
|
1,426,399 |
|
|
|
10,393,042 |
|
|
|
2,534,811 |
|
|
|
14,812,076 |
|
Nonoperating loss |
|
— |
|
|
|
1,300,000 |
|
|
|
— |
|
|
|
1,300,000 |
|
Total operating expenses |
|
4,630,926 |
|
|
|
15,316,421 |
|
|
|
10,004,029 |
|
|
|
23,424,831 |
|
Loss from operations |
|
(4,510,521 |
) |
|
|
(15,136,010 |
) |
|
|
(9,871,091 |
) |
|
|
(22,629,673 |
) |
Interest expense |
|
(95,514 |
) |
|
|
(159,666 |
) |
|
|
(188,951 |
) |
|
|
(159,666 |
) |
Other (expense) income, net |
|
301,615 |
|
|
|
15,485 |
|
|
|
684,936 |
|
|
|
41,086 |
|
Net
loss |
$ |
(4,304,420 |
) |
|
$ |
(15,280,191 |
) |
|
$ |
(9,375,106 |
) |
|
$ |
(22,748,253 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HCW Biologics Inc. Condensed Balance
Sheets |
|
December 31, |
|
June 30, |
|
2023 |
|
2024 |
|
|
|
Unaudited |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
95,101 |
|
|
$ |
1,161,314 |
|
Accounts receivable, net |
|
1,535,757 |
|
|
|
654,973 |
|
Prepaid expenses |
|
1,042,413 |
|
|
|
404,918 |
|
Other current assets |
|
230,916 |
|
|
|
164,607 |
|
Total current assets |
|
6,404,187 |
|
|
|
2,385,812 |
|
Investments |
|
1,599,751 |
|
|
|
1,599,751 |
|
Property, plant and equipment, net |
|
20,453,184 |
|
|
|
22,806,052 |
|
Other assets |
|
56,538 |
|
|
|
28,476 |
|
Total assets |
$ |
28,513,660 |
|
|
$ |
26,820,091 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
(DEFICIT) |
|
|
|
Liabilities |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
6,167,223 |
|
|
$ |
16,877,463 |
|
Accrued liabilities and other current liabilities |
|
2,580,402 |
|
|
|
6,341,676 |
|
Total current liabilities |
|
8,747,625 |
|
|
|
23,219,139 |
|
Debt, net |
|
6,304,318 |
|
|
|
9,900,721 |
|
Total liabilities |
|
15,051,943 |
|
|
|
33,119,860 |
|
Commitments and contingencies (Note 8) |
|
|
|
Stockholders’ equity (deficit): |
|
|
|
Common stock: |
|
|
|
Common, $0.0001 par value; 250,000,000 shares authorized
and 36,025,104 shares issued at December 31, 2023;
250,000,000 shares authorized and 37,823,394 shares
issued at June 30, 2024 |
|
3,603 |
|
|
|
3,782 |
|
Additional paid-in capital |
|
83,990,437 |
|
|
|
86,977,024 |
|
Accumulated deficit |
|
(70,532,323 |
) |
|
|
(93,280,575 |
) |
Total stockholders’ equity (deficit) |
|
13,461,717 |
|
|
|
(6,299,769 |
) |
Total liabilities and stockholders’ equity (deficit) |
$ |
28,513,660 |
|
|
$ |
26,820,091 |
|
HCW Biologics (NASDAQ:HCWB)
Gráfica de Acción Histórica
De Jul 2024 a Ago 2024
HCW Biologics (NASDAQ:HCWB)
Gráfica de Acción Histórica
De Ago 2023 a Ago 2024